America’s innovation success is built on the back of entrepreneurs who embrace experimentalism, risk, and failure. This culture has helped make the United States the unrivalled leader of the digital revolution because it enables the flow of capital to new ventures, innovative management practices, and the audacity to commercialise technological breakthroughs. To the extent that other countries are able to foster a similar culture — underpinned by social capital to sustain it and adapted to their own contexts — they will position themselves to become engines of innovation.
The American experience helps frame a major challenge for Australia. Australia has its own advantages, including a stronger social safety net and an egalitarian ethos, that allow it to embrace elements of American innovation culture while spreading it to pockets of the economy that have been insulated from the frontiers of technological and managerial innovation. Recasting attitudes towards entrepreneurial failure, however, will be crucial. Overcoming the stigma around failure is connected with many of the factors that has Australia ranked 23rd in the 2017 Global Innovation Index and 26th for innovation in the World Economic Forum’s 2016-2017 Global Competitiveness Report.
Drawing on insights from the US experience, this paper assesses the cultural challenge of embracing failure constructively. It argues that there are encouraging developments in the innovation arena in Australia; the start-up and venture capital communities appear to be on the cusp of dramatic growth as the government’s National Innovation and Science Agenda has highlighted the importance of a culture of innovation. Nevertheless, there remains a lot to do. Cultural transitions are hard. But even modest initiatives can generate momentum, especially when their effects are combined.